Prime Minister Malcolm Turnbull has attacked a local council’s decision to stop referring to January 26 as Australia Day, with the government stripping inner Melbourne’s City of Yarra council of its right to hold citizenship ceremonies.

Assistant Minister for Immigration and Border Protection Alex Hawke slammed the council for politicising Australia Day and late on Wednesday announced it would be stripped of the right to to hold citizenship ceremonies.

“The instrument I have signed today means there will be no more citizenship ceremonies conducted by the City of Yarra on behalf of the government,” Mr Hawke said.

Prospective citizens within the City of Yarra will now have to go to ceremonies held by neighbouring councils while the Department of Immigration and Border Protection will hold ceremonies within the City of Yarra as demand requires, including on Australia Day 2018.

Earlier, in Parliament the Prime Minister was glad to steer clear of the Barnaby Joyce citizenship debate to tackle Yarra council and even the support offered to the move by TV personality Karl Stefanovic.

Mr Turnbull said he was “deeply disappointed” by Yarra City Council’s decision, which the Today host threw his support behind in an emotional on-air editorial.

Stefanovic said he had backflipped on his original view that politicians should leave Australia Day alone. The trigger for his about-face?

“Having spoken to several people from those communities, I empathise as hard as some want to ignore it,” said the Nine morning show host.

“January 26 marks the day this land changed forever for one of the oldest and most beautiful cultures in the world.”

He cited “alarming” mortality rates for indigenous and Torres Strait Islanders, invoked the “horror” of the Stolen Generation and said if “we are to truly follow through” with Kevin Rudd’s 2008 National Apology, “then I believe it must change.”

He urged a united front: “So let’s do it together. Certainly, let’s debate it together.”

But Mr Turnbull was having none of it, telling parliament that the decision by the council is “utterly out of step with Australian values.”

While the PM acknowledged that Australia’s history has “complexities and challenges”, on January 26, he said, “We recognise and honour our first Australians and our newest migrant citizens.”

The day, said Mr Turnbull, is “a uniquely and proudly Australian” occasion.

‘Move the celebration’

Stefanovic was keen to continue the celebration but on another day. He made his own suggestion for a revamped Australia Day, saying it could be moved to January 1 so people can combine New Year’s Day with “another party.”

The existing date, he said, “is a rubbish day for a party anyway. Whoever had a party on the 26th of anything?”

PM Malcolm Turnbull was less concerned with the social aspect of the day, slamming the council decision as “an attack” on the national holiday. It is “a repudiation of the values the day celebrates: freedom, a fair go, mateship and diversity,” he said.

“On Australia Day we celebrate what’s great about our wonderful nation,” said Mr Turnbull. “The council is using a day that should unite Australians to divide Australians.”

Despite pressure from the federal government, Yarra City councillors voted unanimously to end all council-run celebrations and citizenship ceremonies on January 26 from 2018 out of respect for indigenous people and Torres Strait Islanders.

“The local government act invites us to be advocates on behalf of our community and that’s what we’re doing here,” said mayor Amanda Stone.

The council had surveyed nearly 300 non-indigenous people in Yarra, said Ms Stone. The community consultation process revealed residents and members of the local indigenous community associated January 26 with feelings of “sadness, trauma and distress.”

People can “still have their barbecues and parties on the January 26 public holiday”, said Ms Stone, “but I hope our stance encourages people to stop and think about what this date really means in the history of our nation.”

The mayor said she was “sorry” that Mr Turnbull is “disappointed”, but insisted the council had “a strong and clear message from the community that something needs to change.”

From 2018 onwards, the inner-Melbourne council will instead mark Australia Day with a “culturally-sensitive event acknowledging the loss of culture, language and identity felt by the community on January 26.”